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Friday, September 05, 2008

Oh, we can all be Peter Yorkes now: new variant download store Popcuts.com is offering you the chance to earn money from buying music.

The idea seems to be that everyone who buys a particular mp3 earns cash when subsequent people buy that file. Any similarity with pyramid selling schemes is, I'm sure, entirely coincidental - because with those, you pay money upfront and make cash back if you're able to find other people to buy the same thing and have to make notices to attach to lampposts.

The skew is that you earn a larger proportion on subsequent sales the earlier you get in. Hence, if you pick up on it quick, not only can you say you were there, but you also get rewarded for being ahead of the pack.

It's an interesting idea, but the main drawback seems to be in the pricing. Tracks cost 99c - and by the time the site and the artist take their share, then there's not going to be much left over for sharing amongst the previous purchasers. And if the cashback is meant to be the lure to buy, if a track is already quite popular, you know you're only going to be looking at thin slivers of cents, which is probably going to reduce the attractiveness of the lure in the first place.

Perhaps Popcuts has missed a trick by making a futures market - they could, instead, have gone with a lottery model, where buying earns you an entry into a drawer. Instead of earning a future tiny royalty, you get the chance to win a pot of cash based on the sales of that track. You could still reward early adopters by giving them more entries, and more chance of winning, while making the inducement to purchase slightly more alluring.